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ED Use After Healthcare Reform: Preparing for the New Reality

Jeffrey Helton

Healthcare reform appears to be settling in for the long haul in the United States (or at least for the next three years), so there’s good reason to continue thinking about how this change will impact the healthcare system. Reading the news recently, I was drawn to an editorial about health care, focused on—of course—problems facing the nation’s healthcare system (I thought it might at least be less depressing than postmortems on my beloved Denver Broncos). The editorial mentioned the expectation that healthcare reform would result in reduced usage of emergency departments (EDs), thereby reducing costs in our communities. I’ve never been a complete believer in that notion, but it raises a concern for those of us who operate emergency services. I honestly think the expectation of changes in ED utilization is an area that finance leaders need to approach with wariness.

Several researchers have looked at changes in the use of ED services in the state of Massachusetts before and after passage of healthcare reform in that state. Because the reforms enacted there are generally similar to those in the Affordable Care Act, the comparison seems fair for predicting what might happen nationwide in the next couple of years. Sarah Miller, in her study “The Effect of Insurance on Emergency Room Visits: An Analysis of the 2006 Massachusetts Health Reform” (Journal of Public Economics, December 2012), found that the total rate of non-urgent use of the ED declined after enactment of healthcare reform in the state. Similar findings were noted in “The Impact of Health Care Reform on Hospital and Preventive Care: Evidence from Massachusetts” by Jonathan Kolstad and Amanda Kowalski (Journal of Public Economics, Aug. 16, 2012). In fact, people having access to insurance do tend to substitute a physician office visit for the ED visit they would have had when uninsured. Great news, right? Not quite. There is more to that headline than just a drop in use of the ED as the uninsured source of primary care.

What we are also seeing in the changes in Massachusetts post-reform ED usage is that the decline in primary care ED visits happens mostly during the hours that physician offices are open. There is less of a decline in those primary care visits during the night and weekend times. Oh, and there remains a portion of the population that will still be uninsured after healthcare reform. Those folks will still rely on the ED to serve as their primary care provider. Also, the overall acuity of ED services increased, due mostly to reducing some of the primary care work that I just mentioned. The serious cases that result in high-cost encounters or admissions now make up a larger proportion of ED utilization in post-healthcare reform Massachusetts.

The take-away from this? First, let’s temper our expectations on improvements in ED bad debts. I can’t say those improvements are as likely to materialize as we might think. Much of the uninsured primary care work hospitals used to deliver in EDs before healthcare reform seems likely to go to the physician’s office after healthcare reform. The uninsured will continue to seek out our services, and the slow uptake of the health insurance exchanges suggests that these patients will continue to be a challenge—and likely a challenge that is proportionately larger than before. Second, let’s take a look at ED utilization patterns and make sure that staffing and resources remain aligned with volumes. At least some shift in utilization timing could happen. Keep an eye on it for opportunities to improve.

Jeffrey Helton, PhD, FHFMA, CMA, CFE, is assistant professor, Metropolitan State University of Denver, and a member of HFMA’s Colorado Chapter.

Healthcare reform appears to be settling in for the long haul in the United States (or at least for the next three years), so there’s good reason to continue thinking about how this change will impact the healthcare system. Reading the news recently, I was drawn to an editorial about health care, focused on—of course—problems facing the nation’s healthcare system (I thought it might at least be less depressing than postmortems on my beloved Denver Broncos). The editorial mentioned the expectation that healthcare reform would result in reduced usage of emergency departments (EDs), thereby reducing costs in our communities. I’ve never been a complete believer in that notion, but it raises a concern for those of us who operate emergency services. I honestly think the expectation of changes in ED utilization is an area that finance leaders need to approach with wariness.

Several researchers have looked at changes in the use of ED services in the state of Massachusetts before and after passage of healthcare reform in that state. Because the reforms enacted there are generally similar to those in the Affordable Care Act, the comparison seems fair for predicting what might happen nationwide in the next couple of years. Sarah Miller, in her study “The Effect of Insurance on Emergency Room Visits: An Analysis of the 2006 Massachusetts Health Reform” (Journal of Public Economics, December 2012), found that the total rate of non-urgent use of the ED declined after enactment of healthcare reform in the state. Similar findings were noted in “The Impact of Health Care Reform on Hospital and Preventive Care: Evidence from Massachusetts” by Jonathan Kolstad and Amanda Kowalski (Journal of Public Economics, Aug. 16, 2012). In fact, people having access to insurance do tend to substitute a physician office visit for the ED visit they would have had when uninsured. Great news, right? Not quite. There is more to that headline than just a drop in use of the ED as the uninsured source of primary care.

What we are also seeing in the changes in Massachusetts post-reform ED usage is that the decline in primary care ED visits happens mostly during the hours that physician offices are open. There is less of a decline in those primary care visits during the night and weekend times. Oh, and there remains a portion of the population that will still be uninsured after healthcare reform. Those folks will still rely on the ED to serve as their primary care provider. Also, the overall acuity of ED services increased, due mostly to reducing some of the primary care work that I just mentioned. The serious cases that result in high-cost encounters or admissions now make up a larger proportion of ED utilization in post-healthcare reform Massachusetts.

The take-away from this? First, let’s temper our expectations on improvements in ED bad debts. I can’t say those improvements are as likely to materialize as we might think. Much of the uninsured primary care work hospitals used to deliver in EDs before healthcare reform seems likely to go to the physician’s office after healthcare reform. The uninsured will continue to seek out our services, and the slow uptake of the health insurance exchanges suggests that these patients will continue to be a challenge—and likely a challenge that is proportionately larger than before. Second, let’s take a look at ED utilization patterns and make sure that staffing and resources remain aligned with volumes. At least some shift in utilization timing could happen. Keep an eye on it for opportunities to improve.

Jeffrey Helton, PhD, FHFMA, CMA, CFE, is assistant professor, Metropolitan State University of Denver, and a member of HFMA’s Colorado Chapter.

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